I bought 100 shares of REI.UN at $25.7 on Friday, as I really like the biggest REIT in canada. I probably could get it at 25.6 as it was my inital order, but after waiting for a while, I decide to just buy it at 25.7, 10 cents won't make too much difference in the long run.
Business Summary:
RioCan REIT is a closed-end real REIT. The trust owns and manages profolio of shopping centers, with ownership interests in a portfolio of 331 retail properties in canada and US.
Below are some of the fundamentals about REI.UN.
- Valuation: PE is 11.0, one of the lowest in REIT, the average PE in REIT is 21
- Profitability: Profit Margin is 62%, one of the hightest in REIT, average REIT is 38%
- Return on Equity: 10%, vs average REIT's 7%
- Divdend yield: 5.51%, lower than the average REIT's 5.8%, but it's enough for me to start the position. my threshold is 4%
- Payout ratio: 60%, this is safer than most REIT ( average is 108%)
- Debt to capital ratio: 45.34% vs 48.05% average for REIT
- Insider buy, CFO just bot 5000 shares at 25.82 in Sep, 2014, so my price is even better.
- Retail REIT continues to benefit from US retailers expanding into Canada. retail penetration in Canada is 40% (square per capita) less than US.
Overall, I think this is the best REIT so far. I will buy more if the price goes lower. For 100 shares of REI.UN, I am expecting to get dividend $141 per year. RioCan's next earning release is Nov 5, 2014, the conference call No is 416-340-2218.
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